According to research by Prudential, nearly 60% of higher rate taxpayers fail to claim full income tax relief on their pension contributions. Based on a survey, the unclaimed tax relief is estimated at £296million a year.
Only 19% of higher rate taxpayers surveyed knew whether they had claimed full income tax relief and only 22% said they did claim the full income tax relief they were entitled to. Prudential estimate that the ‘lost’ income tax relief could amount to £1,020 every year to a higher rate taxpayer.
Higher rate taxpayers, particularly those not in the self assessment system, should seek advice to review their entitlement to tax relief and where applicable make tax relief claims.